November 1st 2016 - A condominium syndicate has the obligation to report its operations using the fund basis of accounting. The article 1071 of the Civil Code of Quebec imposes indeed the creation of a contingency fund. Every condominium has to set up accounts distinguishing the general fund for common operations, sometimes called the administration funds, and the contingency funds.

To avoid financial problems, it is important to verify, before your purchase, that the co-ownership has implemented sound management practices and controls of its expenses. To do so, you should ask questions to your vendor to find out if the syndicate keeps adequate financial records.

I am a recent co-owner. The building I live in has 10 units. The contribution to contingency fund is substantial. In fact, it represents 20% of the budget of the co-ownership! That seems excessive.
Question: Is there a ceiling to the amounts to be paid in the contingency fund

With the adoption of the Civil Code of Québec in 1994, to fill a void in the Law, the Quebec legislature introduced the obligation upon a syndicate of co-owners to fund a "contingency fund”. Prior to the enactment of the Civil Code, it was a frequent occurrence for co-ownerships to have a "reserve fund", although the Civil Code of Lower Canada was mute on this issue. Most of the time, this fund was inadequate, due to the low level of contributions paid into it.

I have been living for a year in a condo I bought in a recently built building. To my surprise, there is still no contingency fund being funded. We pay the common expenses of the immovable monthly (maintenance, snow removal, condo insurance), but no 5% of the budget contribution to "Contingency fund". Yet, a lawyer friend told me it was mandatory!
Question: Is this normal?